daniel chigunwe
Business Writer
The eligibility of pensioners lined up for compensation after their benefits were badly eroded by hyperinflation in the 2000s, is one of the obstacles stifling the process.
The Insurance and Pension Commission (IPEC) is spearheading the implementation process and has since advised pension firms and pension funds to start preparations for compensating policyholders and pensioners who were heavily short-changed during the conversion of their benefits at dollarisation in 2009.
IPEC formed a working committee comprised of stakeholders from the industry to work on the framework. According to the Zimbabwe Association of Pension Fund (ZAPF), the committee interrogated the compensation methods and the question that arose was, what of the pensioners who had been paid a full commutation, including the deceased, and were no longer members of a pension fund.
The ZAPF is part of the committee and said would continue engaging IPEC on the matter.
The Government commissioned an investigation in 2015 into how pensions and insurance benefits were paid out following a big outcry from pensioners and policy holders.
Pension fund values were badly eroded in values due to devastating hyperinflation, which soared to a record 500 billion percent in 2008 according to the IMF.
The Government wiped out the hyperinflation figures in 2009 when it abandoned the use of the Zimbabwe dollar for a basket of foreign currencies, but mostly dominated by the U.S. dollar, leading to what is now generally called dollarisation.
The commission of inquiry, chaired by retired Justice Smith, confirmed a “huge” loss of value to policyholders and pensioners and recommended compensation for the loss suffered.
It established that while policyholders lost value during the conversion period, they had also lost value throughout the investigation period between 1996 and 2014.
Thousands of insurance policyholders and pensioners have been hoping and holding out for additional pay-outs after receiving insignificant amounts as low as US$0,08c after several years of working.
Some of them got zero values owing to lack of benefit inflation-indexation and currency de-basing. The loss of value has left many people, after years of hard work, poor and have been expecting a compensation.
Bongani Ndlovu